Numbers Confirm Holiday Retail Rebound

by Doug Desjardins

Retailers are crediting a late surge in holiday spending for better than expected December and holiday sales. holiday-shopping

Though the numbers are still trickling in, several groups are confirming that sales moved into positive territory for the 2009 holiday shopping season, ending fears of a second-straight decline. The International Council of Shopping Centers (ICSC) survey of 32 retailers showed chain store sales increased 2.8 percent for December, the strongest sales month of 2009 and the best since April 2008.

"I describe it as a nice finish to the holiday season," said ICSC chief economist Michael Niemira. "I think the improvement really echoes the improvement in the underlying economy. We've seen less deterioration in the labor market and on the unemployment front."

A survey by Thomson-Reuters showed almost identical results, with sales increasing 2.9 percent among 30 retailers polled. The survey also showed that discount chains experienced the largest average increase in sales with a 5.4 percent jump, followed by apparel retailers with a 4.7 percent increase and department stores producing a meager 0.7 percent increase.

Ken Perkins of research firm Retail Metrics said the numbers weren't great, but that any bump in sales is welcome, given what retailers went through in 2008 when sales slumped 5 percent. "The holiday season was decent but nothing you could get excited about," said Perkins. "Santa didn't deliver coal but he certainly didn't deliver caviar."

December results showed that most retailers produced a modest improvement in sales. Target notched a 1.8 percent increase, followed closely by Macy's, which managed a 1 percent jump in sales. The biggest winners were warehouse clubs, with Costco reporting a surprising 9 percent increase and BJ's posting a 4.8 percent increase. Best Buy also reported a big jump with December sales increasing 13 percent on the strength of strong sales of cell phones and laptop computers and Nordstrom's registered a surprising 7 percent increase. Wal-Mart doesn't report monthly sales but is expected to post a healthy increase when it releases quarterly sales results.

Retailers that didn't share in the rebound included Sears, with its Sears and Kmart chains reporting a 4.3 percent decline in sales and entertainment retailer Barnes & Noble reporting a 5.4 percent decrease. Children's and teen apparel retailers reported a collective same-store sales decline of 2.5 percent for the month of December, with Abercrombie & Fitch reporting a 19 percent slide and Hot Topic registering a 10 percent decline. Gap and Old Navy managed to produce a 2 percent increase in sales.

At least one analyst said that holiday and December sales are sign of things to come for 2010 when retail sales will improve as the economy recovers. "2010 will build upon the recovery that began at the tail end of 2009," said Niemira.

Resources

ICSC sees 2010 U.S. retail sales rebound

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